[krmmalik]

I loved the discussion with Professor Richard Werner on a podcast lately. He talked about what the European Central Bank is planning and what this means for us as consumers and explains why CBDCs really mean for us.

Here's the full interview

https://youtu.be/OdYmdKUiQNw

[chrisco255]

Could you summarize what his thoughts are?

[krmmalik]

Sure, I'll do my best and hope I'm recalling this correctly.

1. Central banks are regulators, they set the monetary policy that commercial banks must follow

2. Debt is largely created by commercial banks

3. Now the regulator (ECB) wants to be the only creator of debt, thus the regulator is now in direct competition with those it regulates

4. ECB wants to wipe out all the banks and have the pie to itself.

5. Central banks say one thing but their actions often say another

6. CBDCs are not new or revolutionary. Currency is already largely digital and so is debt creation. The only difference here is that the central bank wants to now be the main bank. So the entire public will all bank with one bank. Everyone will have an account at the central bank rather than at a commercial bank of their choice.

7. History tells us this doesn't bode well. This model was run in the Soviet Union and failed terribly. The Central Banks think they are smarter this time but they will fail.

8. Community, non-profit banks are proven to be much better for the economy. Germany had this for a long time which is why it weathered the GFC of 2008, however those community banks are also now being wiped out which means it will struggle to weather this recession successfully.

9. China had a policy change in 1978 which resulted in more community banks and this has contributed significantly to their economic rise.

10. The ECB is not the only central bank with such intentions. Most central banks around the world have the same intentions.